Copyright © 2018 DFL Environmental Caucus  255 Plato Blvd, St Paul, MN 55107. Veda Kanitz, Chair.

Prepared and paid for by DFL Environmental Caucus.

Not authorized by any candidate or candidate's committee. 

Divest of Fossil Fuels

Divest Now!

Tell the Minnesota State Board of Investment and your State elected officials:

Now is the time to divest from fossil fuels and invest in clean energy for our children’s future

 

Why? Because climate change impacts everything.

  • Historically the Minnesota State Board of Investment (SBI) has invested in fossil fuel companies that are damaging our climate.

  • We need to persuade SBI officials to divest from these companies that are damaging our climate.

 

What can you do?

The SBI has a fiduciary duty to those who have entrusted them to guard their pensions. Minnesota public pension holders and taxpayers have a stake in stable, fiscally sound investment policies that respond to accelerating climate instability which will increasingly affect investment decision-making across the globe.

  • Contact your elected officials at the city, county and state levels and your political party leaders to say you want Minnesota’s public pensions divested from fossil fuels.

  • Contact your union leaders and retirement system managers if you are a public pension holder and ask them to support divestment.

 

How are investments made now?

In the past SBI investors have relied on the industry-wide Prudent Person Standard to defend continued investment in fossil fuel companies. Our strategy hinges on the recognition that in fact, correctly interpreted, the Prudent Person Standard compels pension fund fiduciaries to begin to divest from fossil fuels. [1]

 

How does the Prudent Person Standard relate to our climate crisis?

For decades, fiduciaries have routinely considered investment in fossil fuel companies to be a prudent financial risk. In the second decade of the 21st century, this can no longer be said to be true. 

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The climate crisis clearly affects a whole range of circumstances prevailing in our environment NOW. We need to reduce fossil fuel extraction and transport drastically in a critically shortened time frame.  Our task is to convince the SBI and Minnesota decision-makers that current circumstances require them to evaluate risks to SBI’s fossil fuel company holdings.  Climate change has cascading effects in the market, as returns from transport, processing, and sales of fossil fuels continue to decline, and funds from those industries can be freed up for investment in clean energy alternatives.

 

Studies show that investments in companies that are engaged in extracting and transporting carbon-intensive products cause harm to ecological systems and increase risks to the stability of the world economy. Those companies are adding to the threat of potential collapse of ecological systems and catastrophic damage to the world economy, including:

  • severe risk to insurance company assets and liability as a result of costly claims related to the ever-increasing incidence and intensity of rain, hail and snow storms, hurricanes, drought, fire, and flooding -- all caused by increased concentrations of CO2 in the atmosphere resulting from burning fossil fuels;

  • devaluation of real estate value in vulnerable locations such as flooding in river front and coastal areas or those areas impacted by fire, wind, and drought;

  • rising healthcare costs due to deteriorating air quality, extreme heat, and storm-related injuries and illnesses; and

  • This means that pension funds are at greater risk in an increasingly unstable investment climate across several different economic sectors: infrastructure, insurance, real estate, health care, agriculture, etc., in addition to continued market declines in the value of fossil fuel assets.

  • destabilization of government institutions worldwide due to unparalleled migration of climate refugees.

 

What other risks does climate change pose for investments?

We see that responding to climate change charge prudent investors look at their responsibility in critical evolving ways. It should prompt them to turn away from investing in a company IF:

  • Assets owned by the company are at risk of becoming stranded due to steady or precipitous reduction in value of the company's assets when investors worldwide decide to participate in reducing atmospheric carbon by moving their investments away from fossil fuels;

  • A company has fraudulently overvalued its assets by willfully withholding information about harms their products cause to the economy and environment. Those overvalued assets are also at risk.

 

We are all in this crisis together, and a judicious exit requires responsible actions from all of us, including our fiduciary representatives, to maintain healthy and safe communities in the face of increasing climate instability.

 https://www.divestinvestmn.org/     

 

[1] The Prudent Person Standard is described in Minnesota Statute 356A.04 as:

 

Prudent person standard. A fiduciary identified in section 356A.02 shall act in good faith and shall exercise that degree of judgment and care, under the circumstances then prevailing, that persons of prudence, discretion, and intelligence would exercise in the management of their own affairs, not for speculation, considering the probable safety of the plan capital as well as the probable investment return to be derived from the assets.

GET INVOLVED

Divest Invest in Mn

Two Divestment Bills We Support

 

HF2294/SF2277 A bill for an act relating to the State Board of Investment; requiring divestment from certain investments relating to fossil fuels; requiring a report; proposing coding for new law in Minnesota Statues, chapter 11A.

This bill asks the state to divest current investments of fossil fuel companies by 2024. Currently fossil fuels make up $ 2.1 billion of the total investments ($96.2 billion total assets in 2018).  It also states that no new investments can be in fossil fuel companies. It calls on the State Board in Investment to report yearly to the legislature on their progress in these efforts.

The Bills were heard by the Legislative Commission on Pensions and Retirement on March 19 at the end of a long meeting. They were laid over to a future meeting, possibly March 26.

 

Chief Authors: Rep. Jamie Long (DFL) District: 61B

                    Sen. Sandra L. Pappas (65, DFL)

Our Ask:

Co-author or support HF2294/SF2277

 

Supporting evidence:

 

  • According to the IPCC 2018 Special Report, to prevent catastrophic climate change impacts we have until 2030 to cut our emissions of carbon dioxide by 45% from 2010 levels and must get to near net zero emissions by 2050.

  • This means most of the fossil fuel reserves must remain in the ground and become stranded assets.

  • In recent years, investments in the top 200 carbon holding companies have shown high volatility and lower performance. See the graph below.

  • MN has a history of divesting for moral reasons as it did with tobacco, $200 million divested in 1998.

  • The movement is growing with more than 1000 institutions, $8 trillion in assets have divested.

 

Secondary ask: Co-author or support HF2329/SF2276

 

Chief Authors: Rep. Jamie Long (DFL) District: 61B

                    Sen. Sandra L. Pappas (65, DFL)

HF2329   | SF2276

State Board of Investment fossil fuel investment report on climate change impact mandated. The report must include: (a partial list here)

  • the stability and security of investments in companies that are involved in the exploration

and extraction of fossil fuels, …

  • an assessment of the financial risks of continuing to stay invested in fossil fuel

companies, generally, and especially, continued investment in coal mining and producing companies;...

  • identification of already available assessments of alternatives to fossil fuel

investments, including investment in renewable energy companies and engagement in the

governance of those fossil fuel companies that are transitioning to become exclusively

renewable energy resource companies;

  • a summary of existing research on the processes, procedures, and policies utilized

by other public pension funds in the United States to address climate change issues;

  • a description of how climate change is currently addressed in the combined retirement funds of the State Board of Investment;


For more information see: DivestInvest.org

March 2019

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